HR 3146 IH

To amend titles XVIII, XIX, and XXI of the Social Security Act to adjust the Medicare, Medicaid, and children's health insurance programs, as revised by the Balanced Budget Act of 1997.

October 26, 1999

Mr. BLILEY (for himself, Mr. BILIRAKIS, Mr. TAUZIN, Mr. PICKERING, Mr. BLUNT, Mr. BURR of North Carolina, Mr. GREENWOOD, Mr. UPTON, Mr. SHADEGG, Mr. OXLEY, Mr. ROGAN, Mr. WHITFIELD, Mr. DEAL of Georgia, Mr. LAZIO, and Mr. BRYANT) introduced the following bill; which was referred to the Committee on Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To amend titles XVIII, XIX, and XXI of the Social Security Act to adjust the Medicare, Medicaid, and children's health insurance programs, as revised by the Balanced Budget Act of 1997.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; REFERENCES TO BBA; TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Health Care Restoration Act of 1999'.

(b) AMENDMENTS TO SOCIAL SECURITY ACT- Except as otherwise specifically provided, whenever in this title an amendment is expressed in terms of an amendment to or repeal of a section or other provision, the reference shall be considered to be made to that section or other provision of the Social Security Act.

(c) REFERENCES TO BALANCED BUDGET ACT OF 1997- In this Act, the term `BBA' means the Balanced Budget Act of 1997 (Public Law 105-33).

(d) TABLE OF CONTENTS- The table of contents of this Act is as follows:

Sec. 1. Short title; amendments to Social Security Act; references to BBA; table of contents.

TITLE II--PROVISIONS RELATING TO PART B

Subtitle A--Payment for Physician Services

Sec. 201. Modification of update adjustment factor provisions to reduce update oscillations and require estimate revisions.

Sec. 202. Use of data collected by organizations and entities in determining practice expense relative values.

Sec. 203. Study and report to Congress on resources required to provide safe and effective outpatient cancer therapy.

Sec. 204. Limitation on application of practice expense site-of-service differential; reversion to 1997 practice expense RVU's for certain services.

Subtitle B--Hospital Outpatient Services

Sec. 211. Outlier adjustment and transitional pass-through for certain medical devices, drugs, and biologicals.

Sec. 212. Establishing a transitional corridor for application of OPD PPS.

Sec. 213. Hold-harmless for cancer hospitals and small rural hospitals.

Sec. 214. Annual review process for development of HOPD PPS.

Subtitle C--Other

Sec. 221. 2-year moratorium on therapy caps.

Sec. 222. Phase-in of PPS for ambulatory surgical centers.

Sec. 223. Expanding coverage to direct services under telehealth program for medicare beneficiaries participating in certain demonstration projects.

Sec. 224. Provision for part B add-ons for facilities participating in the NHCMQ demonstration project.

Sec. 225. Study on effect of credentialing of technologists and sonographers on quality of ultrasound and imaging services.

Sec. 226. MedPAC study on the complexity of the medicare program and the levels of burdens placed on providers through Federal regulations.

Sec. 227. Elimination of time limitation on medicare benefits for immunosuppressive drugs.

TITLE III--PROVISIONS RELATING TO PARTS A AND B

Subtitle A--Home Health Services

Sec. 301. Report on costs of compliance with OASIS data collection requirements.

Sec. 302. Limitation of OASIS data collection requirements to medicare and medicaid patients.

Sec. 303. Phase-in and partial elimination of the 15 percent reduction in payments under the PPS for home health services.

Sec. 304. Refinement of home health agency consolidated billing for durable medical equipment.

Sec. 305. Use of payments under PPS for home health services for costs associated with the use of telecommunications systems.

Subtitle B--Other

Sec. 311. Permitting reclassification of certain urban hospitals as rural hospitals.

Sec. 312. MedPAC study on medicare payment for non-physician health professional clinical training in hospitals.

TITLE V--PROVISIONS RELATING TO PART C (MEDICARE+CHOICE PROGRAM)

Subtitle A--Medicare+Choice

Sec. 501. Phase-in of new risk adjustment methodology.

Sec. 502. Continued computation and publication of AAPCC data.

Sec. 503. Changes in Medicare+Choice and medigap enrollment rules.

Sec. 504. Allowing variation in premium waivers within a service area if Medicare+Choice payment rates vary within the area.

Sec. 505. Delay in deadline for submission of adjusted community rates and related information.

Sec. 506. Deeming of Medicare+Choice organization to meet requirements.

Sec. 507. Reduction in adjustment in national per capita Medicare+Choice growth percentage for 2001 and 2002.

Sec. 508. 3 year extension of medicare cost contracts.

Sec. 509. Reducing to 2 years the re-entry period after contract termination.

Sec. 510. MedPAC studies relating to risk adjustment.

Sec. 511. MedPAC report on medicare MSA (medical savings account) plans.

Sec. 512. Miscellaneous changes.

Subtitle B--Other Managed Care Provisions

Sec. 521. Medicare competitive pricing demonstration project.

Sec. 512. Inapplicability of OASIS to PACE.

TITLE VI--MEDICAID

Sec. 601. Making medicaid DSH transition rule permanent.

Sec. 602. Increase in DSH allotment for certain States and the District of Columbia.

Sec. 603. New prospective payment system for Federally-qualified health centers and rural health clinics.

Sec. 604. Parity in reimbursement for certain utilization and quality control services.

TITLE VII--STATE CHILDREN'S HEALTH INSURANCE PROGRAM (SCHIP)

Sec. 701. Stabilizing the SCHIP allotment formula.

Sec. 702. Increased allotments for territories under the State children's health insurance program.

TITLE II--PROVISIONS RELATING TO PART B

Subtitle A--Payment for Physician Services

SEC. 201. MODIFICATION OF UPDATE ADJUSTMENT FACTOR PROVISIONS TO REDUCE UPDATE OSCILLATIONS AND REQUIRE ESTIMATE REVISIONS.

(a) UPDATE ADJUSTMENT FACTOR-

(1) IN GENERAL- Section 1848(d) (42 U.S.C. 1395w-4(d)) is amended--

(A) in paragraph (3)--

(i) in the heading, by inserting `FOR 1999 AND 2000' after `UPDATE';

(ii) in subparagraph (A), by striking `a year beginning with 1999' and inserting `1999 and 2000'; and

(iii) in subparagraph (C), by inserting `and paragraph (4)' after `For purposes of this paragraph'; and

(B) by adding at the end the following new paragraph:

`(4) UPDATE FOR YEARS BEGINNING WITH 2001-

`(A) IN GENERAL- Unless otherwise provided by law, subject to the budget-neutrality factor determined by the Secretary under subsection (c)(2)(B)(ii) and subject to adjustment under subparagraph (F), the update to the single conversion factor established in paragraph (1)(C) for a year beginning with 2001 is equal to the product of--

`(i) 1 plus the Secretary's estimate of the percentage increase in the MEI (as defined in section 1842(i)(3)) for the year (divided by 100), and

`(ii) 1 plus the Secretary's estimate of the update adjustment factor under subparagraph (B) for the year.

`(B) UPDATE ADJUSTMENT FACTOR- For purposes of subparagraph (A)(ii), subject to subparagraph (D), the `update adjustment factor' for a year is equal (as estimated by the Secretary) to the sum of the following:

`(i) PRIOR YEAR ADJUSTMENT COMPONENT- An amount determined by--

`(I) computing the difference (which may be positive or negative) between the amount of the allowed expenditures for physicians' services for the prior year (as determined under subparagraph (C)) and the amount of the actual expenditures for such services for that year;

`(II) dividing that difference by the amount of the actual expenditures for such services for that year; and

`(III) multiplying that quotient by 0.75.

`(ii) CUMULATIVE ADJUSTMENT COMPONENT- An amount determined by--

`(I) computing the difference (which may be positive or negative) between the amount of the allowed expenditures for physicians' services (as determined under subparagraph (C)) from April 1, 1996, through the end of the prior year and the amount of the actual expenditures for such services during that period;

`(II) dividing that difference by actual expenditures for such services for the prior year as increased by the sustainable growth rate under subsection (f) for the year for which the update adjustment factor is to be determined; and

`(III) multiplying that quotient by 0.33.

`(C) DETERMINATION OF ALLOWED EXPENDITURES- For purposes of this paragraph--

`(i) PERIOD UP TO APRIL 1, 1999- The allowed expenditures for physicians' services for a period before April 1, 1999, shall be the amount of the allowed expenditures for such period as determined under paragraph (3)(C).

`(ii) TRANSITION TO CALENDAR YEAR ALLOWED EXPENDITURES- Subject to subparagraph (E), the allowed expenditures for--

`(I) the 9-month period beginning April 1, 1999, shall be the Secretary's estimate of the amount of the allowed expenditures that would be permitted under paragraph (3)(C) for such period; and

`(II) the year of 1999, shall be the Secretary's estimate of the amount of the allowed expenditures that would be permitted under paragraph (3)(C) for such year.

`(iii) YEARS BEGINNING WITH 2000- The allowed expenditures for a year (beginning with 2000) is equal to the allowed expenditures for physicians' services for the previous year, increased by the sustainable growth rate under subsection (f) for the year involved.

`(D) RESTRICTION ON UPDATE ADJUSTMENT FACTOR- The update adjustment factor determined under subparagraph (B) for a year may not be less than -0.07 or greater than 0.03.

`(E) RECALCULATION OF ALLOWED EXPENDITURES FOR UPDATES BEGINNING WITH 2001- For purposes of determining the update adjustment factor for a year beginning with 2001, the Secretary shall recompute the allowed expenditures for previous periods beginning on or after April 1, 1999, consistent with subsection (f)(3).

`(F) TRANSITIONAL ADJUSTMENT DESIGNED TO PROVIDE FOR BUDGET NEUTRALITY- Under this subparagraph the Secretary shall provide for an adjustment to the update under subparagraph (A)--

`(i) for each of 2001, 2002, 2003, and 2004, of -0.2 percent; and

`(ii) for 2005 of +0.8 percent.'.

(2) PUBLICATION CHANGE-

(A) IN GENERAL- Section 1848(d)(1)(E) (42 U.S.C. 1395w-4(d)(1)(E)) is amended to read as follows:

`(E) PUBLICATION AND DISSEMINATION OF INFORMATION- The Secretary shall--

`(i) cause to have published in the Federal Register not later than November 1 of each year (beginning with 2000) the conversion factor which will apply to physicians' services for the succeeding year, the update determined under paragraph (4) for such succeeding year, and the allowed expenditures under such paragraph for such succeeding year; and

`(ii) make available to the Medicare Payment Advisory Commission and the public by March 1 of each year (beginning with 2000) an estimate of the conversion factor which will apply to physicians' services for the succeeding year and data used in making such estimate.'.

(B) MEDPAC REVIEW OF CONVERSION FACTOR ESTIMATES- Section 1805(b)(1)(D) (42 U.S.C. 1395b-6(b)(1)(D)) is amended by inserting `and including a review of the estimate of the conversion factor submitted under section 1848(d)(1)(E)(ii)' before the period at the end.

(C) 1-TIME PUBLICATION OF INFORMATION ON TRANSITION- The Secretary of Health and Human Services shall cause to have published in the Federal Register, not later than 90 days after the date of the enactment of this section, the Secretary's determination, based upon the best available data, of--

(i) the allowed expenditures under subclauses (I) and (II) of section 1848(d)(4)(C)(ii) of the Social Security Act, as added by subsection (a)(1)(B), for the 9-month period beginning on April 1, 1999, and for 1999;

(ii) the estimated actual expenditures described in section 1848(d) of such Act for 1999; and

(iii) the sustainable growth rate under section 1848(f) of such Act (42 U.S.C. 1395w-4(f)) for 2000.

(3) CONFORMING AMENDMENTS-

(A) Section 1848 (42 U.S.C. 1395w-4) is amended--

(i) in subsection (d)(1)(A), by inserting `(for years before 2001) and, for years beginning with 2001, multiplied by the update (established under paragraph (4)) for the year involved' after `for the year involved'; and

(ii) in subsection (f)(2)(D), by inserting `or (d)(4)(B), as the case may be' after `(d)(3)(B)'.

(B) Section 1833(l)(4)(A)(i)(VII) (42 U.S.C. 1395l(l)(4)(A)(i)(VII)) is amended by striking `1848(d)(3)' and inserting `1848(d)'.

(b) SUSTAINABLE GROWTH RATES- Section 1848(f) (42 U.S.C. 1395w-4(f)) is amended--

(1) by amending paragraph (1) to read as follows:

`(1) PUBLICATION- The Secretary shall cause to have published in the Federal Register not later than--

`(A) November 1, 2000, the sustainable growth rate for 2000 and 2001; and

`(B) November 1 of each succeeding year the sustainable growth rate for such succeeding year and each of the preceding 2 years.';

(2) in paragraph (2)--

(A) in the matter before subparagraph (A), by striking `fiscal year 1998)' and inserting `fiscal year 1998 and ending with fiscal year 2000) and a year beginning with 2000'; and

(B) in subparagraphs (A) through (D), by striking `fiscal year' and inserting `applicable period' each place it appears;

(3) in paragraph (3), by adding at the end the following new subparagraph:

`(C) APPLICABLE PERIOD- The term `applicable period' means--

`(i) a fiscal year, in the case of fiscal year 1998, fiscal year 1999, and fiscal year 2000; or

`(ii) a calendar year with respect to a year beginning with 2000;

as the case may be.';

(4) by redesignating paragraph (3) as paragraph (4); and

(5) by inserting after paragraph (2) the following new paragraph:

`(3) DATA TO BE USED- For purposes of determining the update adjustment factor under subsection (d)(4)(B) for a year beginning with 2001, the sustainable growth rates taken into consideration in the determination under paragraph (2) shall be determined as follows:

`(A) FOR 2001- For purposes of such calculations for 2001, the sustainable growth rates for fiscal year 2000 and the years 2000 and 2001 shall be determined on the basis of the best data available to the Secretary as of September 1, 2000.

`(B) FOR 2002- For purposes of such calculations for 2002, the sustainable growth rates for fiscal year 2000 and for years 2000, 2001, and 2002 shall be determined on the basis of the best data available to the Secretary as of September 1, 2001.

`(C) FOR 2003 AND SUCCEEDING YEARS- For purposes of such calculations for a year after 2002--

`(i) the sustainable growth rates for that year and the preceding 2 years shall be determined on the basis of the best data available to the Secretary as of September 1 of the year preceding the year for which the calculation is made; and

`(ii) the sustainable growth rate for any year before a year described in clause (i) shall be the rate as most recently determined for that year under this subsection.

Nothing in this paragraph shall be construed as affecting the sustainable growth rates established for fiscal year 1998 or fiscal year 1999.'.

(c) EFFECTIVE DATE- The amendments made by this section shall be effective in determining the conversion factor under section 1848(d) of the Social Security Act (42 U.S.C. 1395w-4(d)) for years beginning with 2001 and shall not apply to or affect any update (or any update adjustment factor) for any year before 2001.

SEC. 202. USE OF DATA COLLECTED BY ORGANIZATIONS AND ENTITIES IN DETERMINING PRACTICE EXPENSE RELATIVE VALUES.

(a) USE- The Secretary of Health and Human Services shall use, to the maximum extent practicable and consistent with sound data practices, data collected or developed by entities and organizations (other than the Department of Health and Human Services) to supplement the data normally collected by that Department in determining the practice expense component under section 1848(c)(2)(C)(ii) of the Social Security Act (42 U.S.C. 1395w-4(c)(2)(C)(ii)) for purposes of determining relative values for payment for physicians' services under the fee schedule under section 1848 of such Act (42 U.S.C. 1395w-4).

(b) REPORT- The Secretary shall submit to Congress, in connection with the publication of the update under section 1848(c) of such Act for 2001, a report on the extent to which the Secretary has used data described in subsection (a) in making adjustments in relative values to be applied under such section in 2001 and the reasons (if any) why the Secretary has not used such data, particularly in cases in which the data otherwise used are inadequate because they are not based upon a large enough sample size to be statistically reliable.

SEC. 203. STUDY AND REPORT TO CONGRESS ON RESOURCES REQUIRED TO PROVIDE SAFE AND EFFECTIVE OUTPATIENT CANCER THERAPY.

(a) STUDY- The Administrator of the Health Care Financing Administration shall conduct a nationwide study to determine the physician and non-physician clinical resources necessary to provide safe outpatient cancer therapy services and the appropriate payment rates for such services under the medicare program. In making such determination, the Secretary shall--

(1) shall determine the adequacy of practice expenses associated with the utilization of those clinical resources;

(2) shall determine the adequacy of work units in the practice expense formula; and

(3) assess various standards to assure the provision of safe outpatient cancer therapy services.

(b) REPORT TO CONGRESS- The Administrator, after consultation with the Medicare Payment Advisory Commission, shall submit to Congress a report on the study conducted under subsection (a). The report shall include recommendations for practice expense adjustments to the payment methodology under part B of the medicare program, including the development and inclusion of adequate work units to assure the adequacy of payment amounts for safe outpatient cancer therapy services. The study shall also include an estimate of the cost of implementing such recommendations.

SEC. 204. LIMITATION ON APPLICATION OF PRACTICE EXPENSE SITE-OF-SERVICE DIFFERENTIAL; REVERSION TO 1997 PRACTICE EXPENSE RVU'S FOR CERTAIN SERVICES.

(a) IN GENERAL- Section 1848(c)(2)(C) (42 U.S.C. 1395w-4(c)(2)(C)) is amended by adding at the end the following new clauses:

`(iv) LIMITATION ON APPLICATION OF PRACTICE EXPENSE SITE-OF-SERVICE DIFFERENTIAL- No site-of-service differential shall be applied to relative value units for services which are provided 10 percent or less in an office setting.

`(v) REVERSION TO 1997 RELATIVE VALUE UNITS- The schedule established under this section shall, as of January 1, 2001, revert to reflect only one professional fee for each CPT-coded service which is provided 10 percent or less in an office setting. The Secretary shall utilize the practice expense relative value units for those services that were published on November 22, 1996, and implemented beginning on January 1, 1997.'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) is effective for services furnished on or after January 1, 2001.

Subtitle B--Hospital Outpatient Services

SEC. 211. OUTLIER ADJUSTMENT AND TRANSITIONAL PASS-THROUGH FOR CERTAIN MEDICAL DEVICES, DRUGS, AND BIOLOGICALS.

(a) OUTLIER ADJUSTMENT- Section 1833(t) (42 U.S.C. 1395l(t)), as added by section 4523(a) of BBA, is amended--

(1) by redesignating paragraphs (5) through (9) as paragraphs (7) through (11), respectively; and

(2) by inserting after paragraph (4) the following new paragraph:

`(5) OUTLIER ADJUSTMENT-

`(A) IN GENERAL- The Secretary shall provide for an additional payment for each covered OPD service (or group of services) for which a hospital's charges, adjusted to cost, exceed--

`(i) a fixed multiple of the sum of--

`(I) the applicable Medicare OPD fee schedule amount determined under paragraph (3)(D), as adjusted under paragraph (4)(A) (other than for adjustments under this paragraph or paragraph (6)); and

`(II) any transitional pass-through payment under paragraph (6); and

`(ii) at the option of the Secretary, such fixed dollar amount as the Secretary may establish.

`(B) AMOUNT OF ADJUSTMENT- The amount of the additional payment under subparagraph (A) shall be determined by the Secretary and shall approximate the marginal cost of care beyond the applicable cutoff point under such subparagraph.

`(C) LIMIT ON AGGREGATE OUTLIER ADJUSTMENTS-

`(i) IN GENERAL- The total of the additional payments made under this paragraph for covered OPD services furnished in a year (as projected or estimated by the Secretary before the beginning of the year) may not exceed the applicable percentage (specified in clause (ii)) of the total program payments projected or estimated to be made under this subsection for all covered OPD services furnished in that year. If this paragraph is first applied to less than a full year, the previous sentence shall apply only to the portion of such year.

`(ii) APPLICABLE PERCENTAGE- For purposes of clause (i), the term `applicable percentage' means a percentage specified by the Secretary up to (but not to exceed)--

`(I) for a year (or portion of a year) before 2004, 2.5 percent; and

`(II) for 2004 and thereafter, 3.0 percent.'.

(b) TRANSITIONAL PASS-THROUGH FOR ADDITIONAL COSTS OF INNOVATIVE MEDICAL DEVICES, DRUGS, AND BIOLOGICALS- Such section is further amended by inserting after paragraph (5) the following new paragraph:

`(6) TRANSITIONAL PASS-THROUGH FOR ADDITIONAL COSTS OF INNOVATIVE MEDICAL DEVICES, DRUGS, AND BIOLOGICALS-

`(A) IN GENERAL- The Secretary shall provide for an additional payment under this paragraph for any of the following that are provided as part of a covered OPD service (or group of services):

`(i) CURRENT ORPHAN DRUGS- A drug or biological that is used for a rare disease or condition with respect to which the drug or biological has been designated as an orphan drug under section 526 of the Federal Food, Drug and Cosmetic Act if payment for the drug or biological as an outpatient hospital service under this part was being made on the first date that the system under this subsection is implemented.

`(ii) CURRENT CANCER THERAPY DRUGS AND BIOLOGICALS- A drug or biological that is used in cancer therapy, if payment for the drug or biological as an outpatient hospital service under this part was being made on such first date.

`(iii) NEW MEDICAL DEVICES, DRUGS, AND BIOLOGICALS- A medical device, drug, or biological not described in clause (i) or (ii) if--

`(I) payment for the device, drug, or biological as an outpatient hospital service under this part was not being made as of December 31, 1996; and

`(II) the cost of the device, drug, or biological is not insignificant in relation to the OPD fee schedule amount (as calculated under paragraph (3)(D)) payable for the service (or group of services) involved.

`(B) LIMITED PERIOD OF PAYMENT- The payment under this paragraph with respect to a medical device, drug, or biological shall only apply during a period of at least 2 years, but not more than 3 years, that begins--

`(i) on the first date this subsection is implemented in the case of a drug or biological described in clause (i) or (ii) of subparagraph (A) and in the case of a device, drug, or biological described in subparagraph (A)(iii) for which payment under this part is made as an outpatient hospital service before such first date; or

`(ii) in the case of a device, drug, or biological described in subparagraph (A)(iii) not described in clause (i), on the first date on which payment is made under this part for the device, drug, or biological as an outpatient hospital service.

`(C) AMOUNT OF ADDITIONAL PAYMENT- Subject to subparagraph (D)(iii), the amount of the payment under this paragraph with respect to a device, drug, or biological provided as part of a covered OPD service is--

`(i) in the case of a drug or biological, the amount by which the amount determined under section 1842(o) for the drug

or biological exceeds the portion of the otherwise applicable medicare OPD fee schedule that the Secretary determines is associated with the drug or biological; or

`(ii) in the case of a medical device, the amount by which the hospital's charges for the device, adjusted to cost, exceeds the portion of the otherwise applicable medicare OPD fee schedule that the Secretary determines is associated with the device.

`(D) LIMIT ON AGGREGATE ANNUAL ADJUSTMENT-

`(i) IN GENERAL- The total of the additional payments made under this paragraph for covered OPD services furnished in a year (as projected or estimated by the Secretary before the beginning of the year) may not exceed the applicable percentage (specified in clause (ii)) of the total program payments projected or estimated to be made under this subsection for all covered OPD services furnished in that year. If this paragraph is first applied to less than a full year, the previous sentence shall apply only to the portion of such year.

`(ii) APPLICABLE PERCENTAGE- For purposes of clause (i), the term `applicable percentage' means--

`(I) for a year (or portion of a year) before 2004, 2.5 percent; and

`(II) for 2004 and thereafter, a percentage specified by the Secretary up to (but not to exceed) 2.0 percent.

`(iii) UNIFORM PROSPECTIVE REDUCTION IF AGGREGATE LIMIT PROJECTED TO BE EXCEEDED- If the Secretary projects or estimates before the beginning of a year that the amount of the additional payments under this paragraph for the year (or portion thereof) as determined under clause (i) without regard to this clause) will exceed the limit established under such clause, the Secretary shall reduce pro rata the amount of each of the additional payments under this paragraph for that year (or portion thereof) in order to ensure that the aggregate additional payments under this paragraph (as so projected or estimated) do not exceed such limit.'.

(c) APPLICATION OF NEW ADJUSTMENTS ON A BUDGET NEUTRAL BASIS- Section 1833(t)(2)(E) (42 U.S.C. 1395l(t)(2)(E)) is amended by striking `other adjustments, in a budget neutral manner, as determined to be necessary to ensure equitable payments, such a outlier adjustments or' and inserting `, in a budget neutral manner, outlier adjustments under paragraph (5) and transitional pass-through payments under paragraph (6) and other adjustments as determined to be necessary to ensure equitable payments, such as'.

(d) LIMITATION ON JUDICIAL REVIEW FOR NEW ADJUSTMENTS- Section 1833(t)(11), as redesignated by subsection (a)(1), is amended--

(1) by striking `and' at the end of subparagraph (C);

(2) by striking the period at the end of subparagraph (D) and inserting `; and'; and

(3) by adding at the end the following:

`(E) the determination of the fixed multiple, or a fixed dollar cutoff amount, the marginal cost of care, or applicable percentage under paragraph (5) or the determination of insignificance of cost, the duration of the additional payments (consistent with paragraph (6)(B)), the portion of the Medicare OPD fee schedule amount associated with particular devices, drugs, or biologicals, and the application of any pro rata reduction under paragraph (6).'.

(e) INCLUSION OF MEDICAL DEVICES UNDER SYSTEM- Section 1833(t) (42 U.S.C. 1395l(t)) is amended--

(1) in paragraph (1)(B)(ii), by striking `clause (iii)' and inserting `clause (iv)' and by striking `but';

(2) by redesignating clause (iii) of paragraph (1)(B) as clause (iv) and inserting after clause (ii) of such paragraph the following new clause:

`(iii) includes medical devices (such as implantable medical devices); but'; and

(3) in paragraph (2)(B), by inserting after `resources' the following: `and so that a device is classified to the group that includes the service to which the device relates'.

(f) AUTHORIZING PAYMENT WEIGHTS BASED ON MEAN HOSPITAL COSTS- Section 1833(t)(2)(C) (42 U.S.C. 1395l(t)(2)(C)) is amended by inserting `(or, at the election of the Secretary, mean)' after `median'.

(g) LIMITING VARIATION OF COSTS OF SERVICES CLASSIFIED WITH A GROUP- Section 1833(t)(2) (42 U.S.C. 1395l(t)(2)) is amended by adding at the end the following: `For purposes of subparagraph (B), items and services within a group shall not be treated as `comparable with respect to the use of resources' if the highest median cost (or mean cost, if elected by the Secretary under subparagraph (C)) for an item or service within the group is more than 2 times greater than the lowest median cost (or mean cost, if so elected) for an item or service within the group; except that the Secretary may make exceptions in unusual cases, such as low volume items and services.'.

(h) NO IMPACT ON COPAYMENT- Section 1833(t)(7) (42 U.S.C. 1395l(t)(7)), as redesignated by subsection (a), is amended by adding at the end the following new subparagraph:

`(D) COMPUTATION IGNORING OUTLIER AND PASS-THROUGH ADJUSTMENTS- The copayment amount shall be computed under subparagraph (A) as if the adjustments under paragraphs (5) and (6) (and any adjustment made under paragraph (2)(E) in relation to such adjustments) had not occurred.'.

(i) TECHNICAL CORRECTION IN REFERENCE RELATING TO HOSPITAL-BASED AMBULANCE SERVICES- Section 1833(t)(9) (42 U.S.C. 1395l(t)(9)), as redesignated by subsection (a), is amended by striking `the matter in subsection (a)(1) preceding subparagraph (A)' and inserting `section 1861(v)(1)(U)'.

(j) EFFECTIVE DATE- The amendments made by this section shall be effective as if included in the enactment of BBA.

SEC. 212. ESTABLISHING A TRANSITIONAL CORRIDOR FOR APPLICATION OF OPD PPS.

(a) IN GENERAL- Section 1833(t) (42 U.S.C. 1395l(t)), as amended by section 211(a), is further amended--

(1) in paragraph (4), in the matter before subparagraph (A), by inserting `, subject to paragraph (7),' after `is determined'; and

(2) by redesignating paragraphs (7) through (11) as paragraphs (8) through (12), respectively; and

(3) by inserting after paragraph (6), as inserted by section 211(b), the following new paragraph:

`(7) TRANSITIONAL ADJUSTMENT TO LIMIT DECLINE IN PAYMENT-

`(A) BEFORE 2002- For covered OPD services furnished before January 1, 2002, for which the PPS amount (as defined in subparagraph (D)(i)) is--

`(i) at least 90 percent, but less than 100 percent, of the pre-BBA amount (as defined in subparagraph (D)(ii)), the amount of payment under this subsection shall be increased by 80 percent of the amount of such difference;

`(ii) at least 80 percent, but less than 90 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by the amount by which (I) the product of 0.71 and the pre-BBA amount, exceeds (II) the product of 0.70 and the PPS amount;

`(iii) at least 70 percent, but less than 80 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by the amount by which (I) the product of 0.63 and the pre-BBA amount, exceeds (II) the product of 0.60 and the PPS amount;

`(iv) less than 70 percent of the pre-BBA amount, the amount of payment under this subsection shall be increased by 21 percent of the pre-BBA amount.

`(B) 2002- For covered OPD services furnished during 2002, for which the PPS amount is--

`(i) at least 90 percent, but less than 100 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by 70 percent of the amount of such difference;

`(ii) at least 80 percent, but less than 90 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by the amount by which (I) the product of 0.61 and the pre-BBA amount, exceeds (II) the product of 0.60 and the PPS amount;

`(iii) less than 80 percent of the pre-BBA amount, the amount of payment under this subsection shall be increased by 13 percent of the pre-BBA amount.

`(C) 2003- For covered OPD services furnished during 2003, for which the PPS amount is--

`(i) at least 90 percent, but less than 100 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by 60 percent of the amount of such difference; or

`(ii) less than 90 percent of the pre-BBA amount, the amount of payment under this subsection shall be increased by 6 percent of the pre-BBA amount.

`(D) DEFINITIONS- For purposes of this subparagraph:

`(i) PPS AMOUNT- The term `PPS amount' means, with respect to a covered OPD service, the amount of payment under this title for such service (determined without regard to this paragraph).

`(ii) PRE-BBA AMOUNT- The term `pre-BBA amount' means, with respect to a covered OPD service, the amount that would have been paid under this title for such service if this subsection did not apply.

`(E) CONSTRUCTION- Nothing in this paragraph shall be construed to affect the copayment amount under paragraph (5).'.

(b) EFFECTIVE DATE- The amendments made by subsection shall be effective as if included in the enactment of BBA.

(c) REPORT ON RURAL AND CANCER HOSPITALS- Not later than July 1, 2002, the Secretary of Health and Human Services shall submit to Congress a report and recommendations on whether the prospective payment system for covered outpatient services furnished under title XVIII of the Social Security Act should apply to the following providers of services furnishing outpatient items and services for which payment is made under such title:

(1) Medicare-dependent, small rural hospitals (as defined in section 1886(d)(5)(G)(iv) of such Act (42 U.S.C. 1395ww(d)(5)(G)(iv))).

(2) Sole community hospitals (as defined in section 1886(d)(5)(D)(iii) of such Act (42 U.S.C. 1395ww(d)(5)(D)(iii)).

(3) Rural health clinics (as defined in section 1861(aa)(2) of such Act (42 U.S.C. 1395x(aa)(2)).

(4) Rural referral centers (as so classified under section 1886(d)(5)(C) of such Act (42 U.S.C. 1395ww(d)(5)(C)).

(5) Any other rural hospital that the Secretary determines appropriate.

(6) Hospitals described in section 1886(d)(1)(B)(v) of such Act (42 U.S.C. 1395ww(d)(1)(B)(v)).

SEC. 213. HOLD-HARMLESS FOR CANCER HOSPITALS AND SMALL RURAL HOSPITALS.

(a) IN GENERAL- Section 1833(t)(10), as so redesignated by section 201(a)(1), is amended--

(1) by striking ` described in section 1886(d)(1)(B)(v)' in the matter before subparagraph (A);

(2) in subparagraphs (A) and (B), by inserting `described in section 1886(d)(1)(B)(v)' after `(A)' and `(B)', respectively;

(3) by striking `and' at the end of subparagraph (A);

(4) by striking the period at the end of subparagraph (B) and inserting `; and'; and

(5) by adding at the end the following new subparagraph:

`(C) notwithstanding paragraph (1), hospitals described in section 1886(d)(1)(B)(v) and hospitals located in a rural area with less than 100 beds, the amount of payment under the system under this subsection for covered OPD services furnished before January 1, 2005, may not be less than the amount of payment under this part for such services that would have been payable under this part under the law as in effect immediately before the implementation of

this subsection (but applying for purposes of such law, the copayment amount otherwise applicable under paragraph (7)).'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) are effective as if included in the enactment of the BBA.

SEC. 214. ANNUAL REVIEW PROCESS FOR DEVELOPMENT OF HOPD PPS.

(a) IN GENERAL- Section 1833(t)(8)(A) (42 U.S.C. 1395l(t)(8)(A)), as redesignated by section 211(a)(1), is amended--

(1) by striking `may periodically review' and inserting `shall review not less often than annually'; and

(2) by adding at the end the following: `The Secretary shall accept and use, to the maximum extent practicable and consistent with sound data practice, data (particularly including data relating to drugs, devices, and biologicals) collected or developed by entities and organizations (other than the Department of Health and Human Services) to supplement the data collected by the Secretary in such review and revisions and shall collect new data with respect to new technologies. The Secretary shall consult with an expert outside panel composed of an appropriate selection of representatives of providers to review revisions proposed to be made by the Secretary.'.

(b) EFFECTIVE DATES- The Secretary of Health and Human Services shall first conduct the annual review under the amendment made by subsection (a)(1) in 2001 for application in 2002 and the amendment made by subsection (a)(2) takes effect on the date of the enactment of this Act.

Subtitle C--Other

SEC. 221. 2-YEAR MORATORIUM ON THERAPY CAPS.

(a) MORATORIUM-

(1) IN GENERAL- Section 1833(g) (42 U.S.C. 1395l(g)) is amended--

(A) in paragraphs (1) and (3), by striking `In the case' each place it appears and inserting `Subject to paragraph (4), in the case'; and

(B) by adding at the end the following:

`(4) This subsection shall not apply to expenses incurred in 2000 and 2001.'.

(2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply to expenses incurred on or after January 1, 2000.

(b) REVISION OF REPORT-

(1) IN GENERAL- Section 4541(d)(2) of the Balanced Budget Act of 1997 (42 U.S.C. 1395l note) is amended to read as follows:

`(2) REPORT- By not later than January 1, 2001, the Secretary of Health and Human Services shall submit to Congress a report that includes recommendations on--

`(A) the establishment of a mechanism for assuring appropriate utilization of outpatient physical therapy services, outpatient occupational therapy services, and speech-language pathology services that are covered under the medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395); and

`(B) the establishment of an alternative payment policy for such services based on classification of individuals by diagnostic category, functional status, prior use of services (in both inpatient and outpatient settings), and such other criteria as the Secretary determines appropriate, in place of the uniform dollar limitations specified in section 1833(g) of such Act, as amended by paragraph (1).

The recommendations shall include how such a mechanism or policy might be implemented in a budget-neutral manner.'.

(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall take effect as if included in the enactment of section 4541 of the Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 454).

(c) STUDY AND REPORT ON UTILIZATION-

(1) STUDY-

(A) IN GENERAL- The Secretary of Health and Human Services shall conduct a study which compares--

(i) utilization patterns (including nationwide patterns, and patterns by region, types of settings, and diagnosis or condition) of outpatient physical therapy services, outpatient occupational therapy services, and speech-language pathology services that are covered under the medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395) and provided on or after January 1, 2000; with

(ii) such patterns for such services that were provided in 1998 and 1999.

(B) REVIEW OF CLAIMS- In conducting the study under this subsection the Secretary of Health and Human Services shall review a statistically significant number of claims for reimbursement for the services described in subparagraph (A).

(2) REPORT- Not later than March 31, 2001, the Secretary of Health and Human Services shall submit a report to Congress on the study conducted under paragraph (1), together with any recommendations for legislation that the Secretary determines to be appropriate as a result of such study.

SEC. 222. PHASE-IN OF PPS FOR AMBULATORY SURGICAL CENTERS.

If the Secretary of Health and Human Services implements a revised prospective payment system for services of ambulatory surgical facilities under part B of title XVIII of the Social Security Act, prior to incorporating data from the 1999 Medicare cost survey, such system shall be implemented consistent with the following principles:

(1) PHASE-IN- The system shall provide that, in the first year (or similar period) of its implementation, only a proportion (specified by the Secretary and not to exceed 1/3 ) of the payment for such services shall be made in accordance with such system and the remainder shall be made in accordance with current regulations, and in the following year a proportion (specified by the Secretary and not to exceed 2/3 ) of the payment for such services shall be made under such system.

(2) BUDGET NEUTRALITY- The system shall be designed so that aggregate payments under such part for such services after the system is implemented shall approximate the aggregate payments that would have been made under such part for such services if the system had not been implemented.

SEC. 223. EXPANDING COVERAGE TO DIRECT SERVICES UNDER TELEHEALTH PROGRAM FOR MEDICARE BENEFICIARIES PARTICIPATING IN CERTAIN DEMONSTRATION PROJECTS.

Section 4206 of BBA (42 U.S.C. 1395l note) is amended by adding at the end the following new subsection:

`(e) EXPANDING COVERAGE TO DIRECT SERVICES FOR MEDICARE BENEFICIARIES PARTICIPATING IN CERTAIN DEMONSTRATION PROJECTS-

`(1) IN GENERAL- Not later than January 1, 2000, the Secretary shall make payments from the Federal Supplementary Medical Insurance Trust Fund under part B of such title in accordance with a payment methodology specified by the Secretary for direct professional services furnished before January 1, 2005, by a physician or practitioner described in subsection (a) via telecommunications systems if--

`(A) payment may be made under such part if the service were provided in person, and

`(B) the beneficiary is participating in a demonstration project receiving funds from the Health Care Financing Administration or the Health Resources and Services Administration.

Such services shall include the broadest possible range of billing codes as determined appropriate by the Secretary.

`(2) STUDY- The Secretary shall conduct a study of the effectiveness of the use of telemedicine services in delivering health care to beneficiaries. The study also shall examine the desirability of permitting billing for direct services across all settings. Not later than 3 years after the date of the enactment of this subsection, the Secretary shall submit to Congress a report on such study.'.

SEC. 224. PROVISION FOR PART B ADD-ONS FOR FACILITIES PARTICIPATING IN THE NHCMQ DEMONSTRATION PROJECT.

(a) IN GENERAL- Section 1888(e)(3) (42 U.S.C. 1395yy(e)(3)), as added by section 4432(a) of BBA, is amended--

(1) in subparagraph (A)--

(A) in clause (i), by inserting `or, in the case of a facility participating in the Nursing Home Case-Mix and Quality Demonstration (RUGS-III), the RUGS-III rate received by the facility during the cost reporting period beginning in 1997' after `to nonsettled cost reports'; and

(B) in clause (ii), by striking `furnished during such period' and inserting `furnished during the applicable cost reporting period described in clause (i)'.

(2) in subparagraph (B), to read as follows:

`(B) UPDATE TO FIRST COST REPORTING PERIOD- The Secretary shall update the amount determined under subparagraph (A), for each cost reporting period after the applicable cost reporting period described in subparagraph (A)(i) and up to the first cost reporting period by a factor equal to the skilled nursing facility market basket percentage increase minus 1 percentage point (except that for the cost reporting period beginning in fiscal year 2001, the factor shall be equal to such market basket percentage plus 0.8 percentage point).'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) shall be effective as if included in the enactment of section 4432(a) of BBA.

SEC. 225. STUDY ON EFFECT OF CREDENTIALING OF TECHNOLOGISTS AND SONOGRAPHERS ON QUALITY OF ULTRASOUND AND IMAGING SERVICES.

(a) STUDY- The Administrator for Health Care Policy and Research shall provide for a study that compares the differences in quality of ultrasound and other imaging services (including error rates and resulting complications) furnished under the medicare and medicaid programs between such services furnished by individuals who are credentialed by private entities or organizations and by those who are not so credentialed. Such study shall examine and evaluate differences in error rates and patient outcomes as a result of the differences in credentialing.

(b) REPORT- By not later than two years after the date of the enactment of this Act, the Administrator shall

submit a report to Congress on the study conducted under subsection (a).

SEC. 226. MEDPAC STUDY ON THE COMPLEXITY OF THE MEDICARE PROGRAM AND THE LEVELS OF BURDENS PLACED ON PROVIDERS THROUGH FEDERAL REGULATIONS.

(a) STUDY- The Medicare Payment Advisory Commission shall undertake a comprehensive study to review the regulatory burdens placed on all classes of health care providers under parts A and B of the medicare program under title XVIII of the Social Security Act and to determine the costs these burdens impose on the nation's health care system. The study shall also examine the complexity of the current regulatory system and its impact on providers.

(b) REPORT- Not later than December 31, 2001, the Commission shall submit to Congress a report on the study conducted under subsection (a). The report shall include recommendations regarding--

(1) how the Health Care Financing Administration can reduce the regulatory burdens placed on patients and providers; and

(2) legislation that may be appropriate to reduce the complexity of the medicare program, including improvement of the rules regarding billing, compliance, and fraud and abuse.

SEC. 227. ELIMINATION OF TIME LIMITATION ON MEDICARE BENEFITS FOR IMMUNOSUPPRESSIVE DRUGS.

(a) IN GENERAL- Section 1861(s)(2)(J) of the Social Security Act (42 U.S.C. 1395x(s)(2)(J)) is amended by striking `, but only' and all that follows up to the semicolon at the end.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to drugs furnished on or after October 1, 2000.

TITLE III--PROVISIONS RELATING TO PARTS A AND B

Subtitle A--Home Health Services

SEC. 301. REPORT ON COSTS OF COMPLIANCE WITH OASIS DATA COLLECTION REQUIREMENTS.

(a) REPORT TO CONGRESS-

(1) IN GENERAL- Not later than 90 days after the date of the enactment of this Act, the Secretary of Health and Human Services shall submit to Congress and the Comptroller General of the United States a report on matters described in paragraph (2) with respect to the data collection requirement of patients of such agencies under the Outcome and Assessment Information Set (OASIS) standard as part of the comprehensive assessment of patients.

(2) MATTERS STUDIED- For purposes of paragraph (1), the matters described in this paragraph include the following:

(A) An assessment of the costs incurred by medicare home health agencies in complying with such data collection requirement.

(B) An analysis of the effect of such data collection requirement on the privacy interests of patients from whom data is collected.

(3) GAO AUDIT- The Comptroller General of the United States shall conduct an independent audit of the costs described in paragraph (2)(A). Not later than 180 days after receipt of the report under paragraph (1), the Comptroller General shall submit to Congress a report describing the Comptroller General's findings with respect to such audit, and shall include comments on the report submitted to Congress by the Secretary of Health and Human Services under paragraph (1).

(b) DEFINITIONS- In this section:

(1) COMPREHENSIVE ASSESSMENT OF PATIENTS- The term `comprehensive assessment of patients' means the rule published by the Health Care Financing Administration that requires, as a condition of participation in the medicare program, a home health agency to provide a patient-specific comprehensive assessment that accurately reflects the patient's current status and that incorporates the Outcome and Assessment Information Set (OASIS).

(2) OUTCOME AND ASSESSMENT INFORMATION SET- The term `Outcome and Assessment Information Set' means the standard provided under the rule relating to data items that must be used in conducting a comprehensive assessment of patients.

SEC. 302. LIMITATION OF OASIS DATA COLLECTION REQUIREMENTS TO MEDICARE AND MEDICAID PATIENTS.

Effective as if included in the enactment of the Balanced Budget Act of 1997 (Public Law 105-33), section 4602(e) of such Act (42 U.S.C. 1395fff note) is amended by adding at the end the following new sentence: `Notwithstanding any provision of section 1891 of the Social Security Act (42 U.S.C. 1395bbb) to the contrary, the Secretary may only require the submission of additional information under this subsection with respect to individuals who are entitled to benefits under parts A, B, or C of title XVIII of such Act, or an individual eligible for medical assistance under the State plan under title XIX of such Act.'.

SEC. 303. PHASE-IN AND PARTIAL ELIMINATION OF THE 15 PERCENT REDUCTION IN PAYMENTS UNDER THE PPS FOR HOME HEALTH SERVICES.

Section 1895(b)(3)(A) (42 U.S.C. 1395fff(b)(3)(A)) (as amended by section 5101 of the Tax and Trade Relief Extension Act of 1998 (contained in division J of Public Law 105-277)) is amended--

(1) in clause (i)--

(A) by striking the period at the end of the first sentence and the second sentence and inserting the following: `as follows:

`(I) Such amount (or amounts) shall initially be based on the most current audited cost report data available to the Secretary and shall be computed in a manner so that the total amounts payable under the system for fiscal year 2001 shall be equal to the total amount that would have been made if the system had not been in effect, but if the reduction in limits described in clause (ii) (applied by

substituting `5' for `12.5') had been in effect.

`(II) For fiscal year 2002, such amount (or amounts) shall be equal to the amount (or amounts) that would have been determined under subclause (I) if the reduction in limits described in clause (ii) (applied by substituting `10' for `12.5') had been in effect for fiscal year 2001, and updated under subparagraph (B) for fiscal year 2002.

`(II) For fiscal year 2003, such amount (or amounts) shall be equal to the amount (or amounts) that would have been determined under subclause (I) if the reduction in limits described in clause (ii) had been in effect for fiscal year 2001, and updated under subparagraph (B) for fiscal years 2002 and 2003.'; and

(B) by striking `Such amount' in the third sentence and inserting `Each such amount'; and

(2) in clause (ii), by striking `15 percent' and inserting `12.5 percent'.

SEC. 304. REFINEMENT OF HOME HEALTH AGENCY CONSOLIDATED BILLING FOR DURABLE MEDICAL EQUIPMENT.

(a) IN GENERAL- Section 1842(a)(6)(F) (42 U.S.C. 1395u(a)(6)(F)), as amended by section 4603(c)(2)(B) of BBA, is amended by inserting `(including medical supplies but excluding durable medical equipment to the extent provided for in section 1861(m)(5))' after `home health services'.

(b) CONFORMING AMENDMENT- Section 1862(a)(21) (42 U.S.C. 1395y(a)(21)) is amended by inserting `(including medical supplies but excluding durable medical equipment to the extent provided for in section 1861(m)(5))' after `home health services'.

(c) EFFECTIVE DATE- The amendments made by this section apply to services furnished on or after the date of the enactment of this Act.

SEC. 305. USE OF PAYMENTS UNDER PPS FOR HOME HEALTH SERVICES FOR COSTS ASSOCIATED WITH THE USE OF TELECOMMUNICATIONS SYSTEMS.

(a) IN GENERAL- Section 1895(b) (42 U.S.C. 1395fff(b)) (as added by section 4603(a) of the Balanced Budget Act of 1997 and amended by section 5101 of the Tax and Trade Relief Extension Act of 1998 (contained in division J of Public Law 105-277)) is amended by adding at the end the following new paragraph:

`(7) USE OF TELECOMMUNICATIONS SYSTEMS- A home health agency receiving payment under the system under this subsection shall be permitted by the Secretary to use such payments to cover the cost of services, training, and supervision when they are provided to beneficiaries under this title in that beneficiary's place of residence via telecommunication systems. The payment available to the agency under such system shall be the same as it would be if the telecommunications systems were not used. Such telecommunications systems may not be substituted for services required to establish or maintain eligibility for home health services under section 1814(a)(2)(C) or 1835(a)(2)(A).'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) applies with respect to items and services furnished on or after the date of the enactment of this Act.

Subtitle B--Other

SEC. 311. PERMITTING RECLASSIFICATION OF CERTAIN URBAN HOSPITALS AS RURAL HOSPITALS.

(a) IN GENERAL- Section 1886(d)(8) (42 U.S.C. 1395ww(d)(8)) is amended by adding at the end the following new subparagraph:

`(E)(i) For purposes of this subsection and section 1833(t), not later than 60 days after the receipt of an application from a subsection (d) hospital described in clause (ii), the Secretary shall treat the hospital as being located in the rural area (as defined in such paragraph (2)(D)) of the State in which the hospital is located.

`(ii) For purposes of clause (i), a subsection (d) hospital described in this clause is a subsection (d) hospital that is located in an urban area (as defined in paragraph (2)(D)) and satisfies any of the following criteria:

`(I) The hospital is located in a rural census tract of a metropolitan statistical area (as determined under the Goldsmith Modification, as published in the Federal Register on February 27, 1992 (57 FR 6725)).

`(II) The hospital is located in an area designated by any law or regulation of such State as a rural area (or is designated by such State as a rural hospital).

`(iii) The hospital would qualify as a sole community hospital under paragraph (5)(D) or as a rural or regional or national referral center under paragraph (5)(C) if the hospital were located in a rural area.

`(iv) The hospital meets such other criteria as the Secretary may specify.'.

(b) CONFORMING CHANGE- Section 1820(c)(2)(B)(i) (42 U.S.C. 1395i-4(c)(2)(B)(i)) is amended by inserting `or is treated as being located in a rural area pursuant to section 1886(d)(8)(E)' after `section 1886(d)(2)(D)).'.

(c) EFFECTIVE DATE- The amendments made by this section shall become effective on January 1, 2000.

SEC. 312. MEDPAC STUDY ON MEDICARE PAYMENT FOR NON-PHYSICIAN HEALTH PROFESSIONAL CLINICAL TRAINING IN HOSPITALS.

(a) IN GENERAL- The Medicare Payment Advisory Commission shall conduct a study on medicare payment policy with respect to graduate clinical training of different classes of non-physician health care professionals (such as nurses, allied health professionals, physician assistants, and psychologists) and the basis for any differences in treatment among such classes.

(b) REPORT- The Commission shall submit a report to Congress on the study conducted under subsection (a) not later than 18 months after the date of the enactment of this Act.

TITLE V--PROVISIONS RELATING TO PART C (MEDICARE+CHOICE PROGRAM)

Subtitle A--Medicare+Choice

SEC. 501. PHASE-IN OF NEW RISK ADJUSTMENT METHODOLOGY.

Section 1853(a)(3)(C) (42 U.S.C. 1395w-23(a)(3)(C)) is amended--

(1) by redesignating the first sentence as clause (i) with the heading `IN GENERAL- ' and appropriate indentation; and

(2) by adding at the end the following new clause:

`(ii) PHASE-IN- Subject to clause (iii)(II), such risk adjustment methodology shall be implemented in a phased-in manner so that the new methodology applies only to--

`(I) 10 percent of the payment amount in 2000, 2001, 2002, and 2003;

`(II) 50 percent of such amount in 2004;

`(III) 75 percent of such amount in 2005; and

`(IV) 100 percent of such amount in any subsequent year.

`(iii) REQUIREMENT AND CONTINGENCY-

`(I) REQUIREMENT- The Secretary shall provide for the application of data from multiple settings (including hospital outpatient settings) in applying the risk methodology in years beginning with 2004.

`(II) CONTINGENCY- The percent applied under clause (ii) shall not exceed 10 percent in a year after 2003 unless the Secretary is using data from multiple settings (including hospital outpatient settings) in applying the risk methodology in that year.'.

SEC. 502. CONTINUED COMPUTATION AND PUBLICATION OF AAPCC DATA.

(a) IN GENERAL- Section 1853(b) (42 U.S.C. 1395w-23(b)) is amended by adding at the end the following new paragraph:

`(4) CONTINUED COMPUTATION AND PUBLICATION OF COUNTY-SPECIFIC PER CAPITA FEE-FOR-SERVICE EXPENDITURE INFORMATION- The Secretary, through the Chief Actuary of the Health Care Financing Administration, shall provide for the computation and publication, on an annual basis at the time of publication of the annual Medicare+Choice capitation rates, of information on the level of the average annual per capita costs (described in section 1876(a)(4)) for each Medicare+Choice payment area.'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect on the date of the enactment of this Act and apply to publications of the annual Medicare+Choice capitation rates made on or after such date.

SEC. 503. CHANGES IN MEDICARE+CHOICE AND MEDIGAP ENROLLMENT RULES.

(a) PERMITTING ENROLLMENT IN ALTERNATIVE MEDICARE+CHOICE PLANS IN CASE OF INVOLUNTARY TERMINATION OF MEDICARE+CHOICE ENROLLMENT- Section 1851(e)(4) (42 U.S.C. 1395w-21(e)(4)) is amended by striking subparagraph (A) and inserting the following:

`(A)(i) the certification of the organization or plan under this part has been terminated, or the organization or plan has notified the individual of an impending termination of such certification; or

`(ii) the organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides, or has notified the individual of an impending termination or discontinuation of such plan;'.

(b) CONFORMING MEDIGAP AMENDMENT- Section 1882(s)(3)(A) (42 U.S.C. 1395ss(s)(3)(A)) is amended, in the matter following clause (iii)--

(1) by inserting `(or, if elected by the individual, the date of notification of the individual or the Secretary by the plan or organization of the impending termination or discontinuance of the plan in the area in which the individual resides)' after `the

date of the termination of enrollment described in such subparagraph'; and

(2) by inserting `(or the date of such notification)' after `the date of termination or disenrollment'.

SEC. 504. ALLOWING VARIATION IN PREMIUM WAIVERS WITHIN A SERVICE AREA IF MEDICARE+CHOICE PAYMENT RATES VARY WITHIN THE AREA.

(a) IN GENERAL- Section 1854(c) (42 U.S.C. 1395w-24(c)) is amended--

(1) by striking `The' and inserting `Subject to paragraph (2), the';

(2) by redesignating the first sentence as a paragraph (1) with an appropriate indentation and the heading `IN GENERAL- '; and

(3) by adding at the end the following new paragraph:

`(2) VARIATION IN PREMIUM WAIVER PERMITTED- A Medicare+Choice organization may waive part or all of a premium described in paragraph (1) for one or more Medicare+Choice payment areas within its service area if the annual Medicare+Choice capitation rates under section 1853(c) vary between such payment area and other payment areas within such service area.'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) apply to premiums for contract years beginning on or after January 1, 2001.

SEC. 505. DELAY IN DEADLINE FOR SUBMISSION OF ADJUSTED COMMUNITY RATES AND RELATED INFORMATION.

(a) DELAY IN DEADLINE FOR SUBMISSION OF ADJUSTED COMMUNITY RATES AND RELATED INFORMATION- Section 1854(a)(1) (42 U.S.C. 1395w-24(a)(1)) is amended by striking `May 1' and inserting `July 1'.

(b) ADJUSTMENT IN INFORMATION DISCLOSURE PROVISIONS- Section 1851(d)(2)(A)(ii) (42 U.S.C. 1395w-21(d)(2)(A)(ii)) is amended by inserting after `information described in paragraph (4) concerning such plans' the following: `, to the extent such information is available at the time of preparation of the material for mailing'.

SEC. 506. DEEMING OF MEDICARE+CHOICE ORGANIZATION TO MEET REQUIREMENTS.

Section 1852(e)(4) (42 U.S.C. 1395w-22(e)(4)) is amended to read as follows:

`(4) TREATMENT OF ACCREDITATION- The Secretary shall provide that a Medicare+Choice organization is deemed to meet requirements of paragraphs (1) and (2) of this subsection and subsection (h) (relating to confidentiality and accuracy of enrollee records) if the organization is accredited (and periodically reaccredited) by a private accrediting organization under a process that the Secretary has determined assures that the accrediting organization applies standards that meet or exceed the standards established under section 1856 to carry out the respective requirements. The Secretary shall determine, within 90 days after the date the Secretary receives an application by a private accrediting organization, whether the process of the private accrediting organization meets the requirements of the preceding sentence using the criteria specified in section 1865(b)(2). The Secretary shall, using the process described in section 1865(b), deem a Medicare+Choice organization that is so accredited as meeting the requirements of paragraphs (1) and (2) of this subsection and subsection (h).'

SEC. 507. REDUCTION IN ADJUSTMENT IN NATIONAL PER CAPITA MEDICARE+CHOICE GROWTH PERCENTAGE FOR 2001 AND 2002.

Section 1853(c)(6)(B) (42 U.S.C. 1395w-23(c)(6)(B)) is amended in clauses (iv) and (v) by striking `0.5 percentage points' and inserting `0.3 percentage points'.

SEC. 508. 3 YEAR EXTENSION OF MEDICARE COST CONTRACTS.

Section 1876(h)(5)(B) (42 U.S.C. 1395mm(h)(5)(B)) is amended by striking `2002' and inserting `2005'.

SEC. 509. REDUCING TO 2 YEARS THE RE-ENTRY PERIOD AFTER CONTRACT TERMINATION.

(a) IN GENERAL- Section 1857(c)(4) (42 U.S.C. 1395w-27(c)(4)) is amended by striking `5-year period' and inserting `2-year period'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) applies to contract terminations occurring before, on, or after the date of the enactment of this Act.

SEC. 510. MEDPAC STUDIES RELATING TO RISK ADJUSTMENT.

(a) STUDY- The Medicare Payment Advisory Commission established under section 1805 of the Social Security Act (42 U.S.C. 1395b-6) (in this section referred to as `MedPAC') shall conduct a study on the adequacy and accuracy of health-based risk adjustment methodologies being developed and used by the Health Care Financing Administration in the Medicare+Choice program.

(b) REPORT- The Commission shall submit to Congress by March 1, 2001, a report on the study under subsection (a) and shall include recommendations regarding alternative risk adjustment methodologies that are less onerous.

SEC. 511. MEDPAC REPORT ON MEDICARE MSA (MEDICAL SAVINGS ACCOUNT) PLANS.

Not later than 1 year after the date of the enactment of this Act, the Medicare Payment Advisory Commission shall submit to Congress a report on specific legislative changes that should be made to make MSA plans a viable option under the Medicare+Choice program.

SEC. 512. MISCELLANEOUS CHANGES.

(a) PERMITTING RELIGIOUS FRATERNAL BENEFIT SOCIETIES TO OFFER A RANGE OF MEDICARE+CHOICE PLANS- Section 1859(e)(2)(A) (42 U.S.C. 1395w-29(e)(2)(A)) is amended by striking `section 1851(a)(2)(A)' and inserting `section 1851(a)(2)'.

Subtitle B--Other Managed Care Provisions

SEC. 521. MEDICARE+CHOICE COMPETITIVE BIDDING DEMONSTRATION PROJECT.

Section 4011 of BBA is amended--

(1) in subsection (a)--

(A) by striking `The Secretary' and inserting the following:

`(1) IN GENERAL- Subject to the succeeding provisions of this subsection, the Secretary'; and

(B) by adding at the end the following:

`(2) DELAY IN IMPLEMENTATION- The Secretary shall not implement the project until January 1, 2002, or, if later, 6 months after the date the Competitive Pricing Advisory Committee has submitted to Congress a report on each of the following topics:

`(A) INCORPORATION OF ORIGINAL FEE-FOR-SERVICE MEDICARE PROGRAM INTO PROJECT- What changes would be required in the project to feasibly incorporate the original fee-for-service medicare program into the project in the areas in which the project is operational.

`(B) QUALITY ACTIVITIES- The nature and extent of the quality reporting and monitoring activities that should be required of plans participating in the project, the estimated costs that plans will incur as a result of these requirements, and the current ability of the Health Care Financing Administration to collect and report comparable data, sufficient to support comparable quality reporting and monitoring activities with respect to beneficiaries enrolled in the original fee-for-service medicare program generally.

`(C) RURAL PROJECT- The current viability of initiating a project site in a rural area, given the site specific budget neutrality requirements of the project, and insofar as the Committee decides that the addition of such a site is not viable, recommendations on how the project might best be changed so that such a site is viable.

`(D) BENEFIT STRUCTURE- The nature and extent of the benefit structure that should be required of plans participating in the project, the rationale for such benefit structure, the potential implications that any benefit standardization requirement may have on the number of plan choices available to a beneficiary in an area designated under the project, the potential implications of requiring participating plans to offer variations on any standardized benefit package the committee might recommend, such that a beneficiary could elect to pay a higher percentage of out-of-pocket costs in exchange for a lower premium (or premium rebate as the case may be), and the potential implications of expanding the project (in conjunction with the potential inclusion of the original fee-for-service medicare program) to require medicare supplemental insurance plans operating in an area designated under the project to offer a coordinated and comparable standardized benefit package.

`(3) CONFORMING DEADLINES- Any dates specified in the succeeding provisions of this section shall be delayed (as specified by the Secretary) in a manner consistent with the delay effected under paragraph (2).'; and

(2) in subsection (c)(1)(A)--

(A) by striking `and' at the end of clause (i); and

(B) by adding at the end the following new clause:

`(iii) establish beneficiary premiums for plans offered in such area in a manner such that a beneficiary who enrolls in an offered plan with a below average price (as established by the competitive pricing methodology established for such area) may, at the plan's election, be offered a rebate of some or all of the medicare part B premium that such individual must otherwise pay in order to participate in a Medicare+Choice plan under the Medicare+Choice program; and'.

SEC. 522. INAPPLICABILITY OF OASIS TO PACE.

Sections 1894(e)(3) and 1934(e)(3) (42 U.S.C. 1395eee(e)(3); 1396u-4(e)(3)) are each amended by adding at the end the following:

`(C) INAPPLICABILITY OF OASIS TO PACE- Notwithstanding the previous provisions of this paragraph, with respect to any home health service provided under a PACE program under this section, the Secretary shall not apply the data collection and reporting requirements under the Outcome and Assessment Information Set (OASIS) to such program or to any enrollee of such program, regardless of whether such service is provided by a PACE program directly or through a contract with a home health agency.'.

TITLE VI--MEDICAID

SEC. 601. MAKING MEDICAID DSH TRANSITION RULE PERMANENT.

(a) IN GENERAL- Section 4721(e) of the Balanced Budget Act of 1997 (42 U.S.C. 1396r-4 note) is amended--

(1) in the matter before paragraph (1), by striking `1923(g)(2)(A)' and `1396r-4(g)(2)(A)' and inserting `1923(g)(2)' and `1396r-4(g)(2)', respectively;

(2) in paragraphs (1) and (2)--

(A) by striking `, and before July 1, 1999'; and

(B) by striking `in such section' and inserting `in subparagraph (A) of such section'; and

(3) by striking `and' at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting `; and', and by adding at the end the following new paragraph:

`(3) effective for State fiscal years that begin on or after July 1, 1999, `or (b)(1)(B)' were inserted in section 1923(g)(2)(B)(ii)(I) after `(b)(1)(A)'.'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) shall take effect as if included in the enactment of section 4721(e) of the Balanced Budget Act of 1997 (Public Law 105-33; 110 Stat. 514).

SEC. 602. INCREASE IN DSH ALLOTMENT FOR CERTAIN STATES AND THE DISTRICT OF COLUMBIA.

(a) IN GENERAL- The table in section 1923(f)(2) (42 U.S.C. 1396r-4(f)(2)) is amended under each of the columns for FY 00, FY 01, and FY 02--

(1) in the entry for the District of Columbia, by striking `23' and inserting `32';

(2) in the entry for Minnesota, by striking `16' and inserting `33';

(3) in the entry for New Mexico, by striking `5' and inserting `9'; and

(4) in the entry for Wyoming, by striking `0' and inserting `.100'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) take effect on October 1, 1999, and applies to expenditures made on or after such date.

SEC. 603. NEW PROSPECTIVE PAYMENT SYSTEM FOR FEDERALLY-QUALIFIED HEALTH CENTERS AND RURAL HEALTH CLINICS.

(a) IN GENERAL- Section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)) is amended--

(1) in paragraph (13)--

(A) in subparagraph (A), by adding `and' at the end;

(B) in subparagraph (B), by striking `and' at the end; and

(C) by striking subparagraph (C); and

(2) by inserting after paragraph (14) the following new paragraph:

`(15) for payment for services described in clause (B) or (C) of section 1905(a)(2) under the plan in accordance with subsection (aa);'.

(b) NEW PROSPECTIVE PAYMENT SYSTEM- Section 1902 of the Social Security Act (42 U.S.C. 1396a) is amended by adding at the end the following:

`(aa) PAYMENT FOR SERVICES PROVIDED BY FEDERALLY-QUALIFIED HEALTH CENTERS AND RURAL HEALTH CLINICS-

`(1) IN GENERAL- Beginning with fiscal year 2000 and each succeeding fiscal year, the State plan shall provide for payment for services described in section 1905(a)(2)(C) furnished by a Federally-qualified health center and services described in section 1905(a)(2)(B) furnished by a rural health clinic in accordance with the provisions of this subsection.

`(2) FISCAL YEAR 2000- Subject to paragraph (4), for services furnished during fiscal year 2000, the State plan shall provide for payment for such services in an amount (calculated on a per visit basis) that is equal to 100 percent of the costs of the center or clinic of furnishing such services during fiscal year 1999 which are reasonable and related to the cost of furnishing such services, or based on such other tests of reasonableness as the Secretary prescribes in regulations under section 1833(a)(3), or, in the case of services to which such regulations do not apply, the same methodology used under section 1833(a)(3), adjusted to take into account any increase in the scope of such services furnished by the center or clinic during fiscal year 2000.

`(3) FISCAL YEAR 2001 AND SUCCEEDING FISCAL YEARS- Subject to paragraph (4), for services furnished during fiscal year 2001 or a succeeding fiscal year, the State plan shall provide for payment for such services in an amount (calculated on a per visit basis) that is equal to the amount calculated for such services under this subsection for the preceding fiscal year--

`(A) increased by the percentage increase in the MEI (as defined in section 1842(i)(3)) applicable to primary care services (as defined in section 1842(i)(4)) for that fiscal year; and

`(B) adjusted to take into account any increase in the scope of such services furnished by the center or clinic during that fiscal year.

`(4) ESTABLISHMENT OF INITIAL YEAR PAYMENT AMOUNT FOR NEW CENTERS OR CLINICS- In any case in which an entity first qualifies as a Federally-qualified health center or rural health clinic after fiscal year 1999, the State plan shall provide for payment for services described in section 1905(a)(2)(C) furnished by the center or services described in section 1905(a)(2)(B) furnished by the clinic in the first fiscal year in which the center or clinic so qualifies in an amount (calculated on a per visit basis) that is equal to 100 percent of the costs of furnishing such services during such fiscal year in accordance with the regulations and methodology referred to in paragraph (2). For each fiscal year following the fiscal year in which the entity first qualifies as a Federally-qualified health center or rural health clinic, the State plan shall provide for the payment amount to be calculated in accordance with paragraph (3).

`(5) ADMINISTRATION IN THE CASE OF MANAGED CARE- In the case of services furnished by a Federally-qualified health center or rural health clinic pursuant to a contract between the center or clinic and a managed care entity (as defined in section 1932(a)(1)(B)), the State plan shall provide for payment to the center or clinic (at least quarterly) by the State of a supplemental payment equal to the amount (if any) by which the amount determined under paragraphs (2), (3), and (4) of this subsection exceeds the amount of the payments provided under the contract.

`(6) ALTERNATIVE PAYMENT METHODOLOGIES- Notwithstanding any other provision of this section, the State plan may provide for payment in any fiscal year to a Federally-qualified health center for services described in section 1905(a)(2)(C) or to a rural health clinic for services described in section 1905(a)(2)(B) in an amount which is determined under an alternative payment methodology that--

`(A) is agreed to by the State and the center or clinic; and

`(B) results in payment to the center or clinic of an amount which is at least equal to the amount otherwise required to be paid to the center or clinic under this section.'.

(c) CONFORMING AMENDMENTS-

(1) Section 4712 of the Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 508) is amended by striking subsection (c).

(2) Section 1915(b) of the Social Security Act (42 U.S.C. 1396n(b)) is amended by striking `1902(a)(13)(E)' and inserting `1902(a)(15), 1902(aa),'.

(d) EFFECTIVE DATE- The amendments made by this section take effect on October 1, 1999, and apply to services furnished on or after such date.

SEC. 604. PARITY IN REIMBURSEMENT FOR CERTAIN UTILIZATION AND QUALITY CONTROL SERVICES.

(a) IN GENERAL- Section 1903(a)(3)(C)(i) (42 U.S.C. 1396b(a)(3)(C)(i)) is amended--

(1) by inserting `(other than a review described in clause (ii))' after `quality review'; and

(2) by inserting `(or under a contract with the State that sets forth standards of performance equivalent to those under section 1902(d))' before the semicolon.

(b) EFFECTIVE DATE- The amendments made by subsection (a) apply to expenditures made on and after the date of the enactment of this Act.

TITLE VII--STATE CHILDREN'S HEALTH INSURANCE PROGRAM (SCHIP)

SEC. 701. STABILIZING THE SCHIP ALLOTMENT FORMULA.

(a) IN GENERAL- Section 2104(b) (42 U.S.C. 1397dd(b)) is amended--

(1) in paragraph (2)(A)--

(A) in clause (i), by striking `through 2000' and inserting `and 1999'; and

(B) in clause (ii), by striking `2001' and inserting `2000';

(2) by amending paragraph (4) to read as follows:

`(4) FLOORS AND CEILINGS IN STATE ALLOTMENTS-

`(A) IN GENERAL- The proportion of the allotment under this subsection for a subsection (b) State (as defined in subparagraph (D)) for fiscal year 2000 and each fiscal year thereafter shall be subject to the following floors and ceilings:

`(i) FLOOR OF $2,000,000- A floor equal to $2,000,000 divided by the total of the amount available under this subsection for all such allotments for the fiscal year.

`(ii) ANNUAL FLOOR OF 10 PERCENT BELOW PRECEDING FISCAL YEAR'S PROPORTION- A floor of 90 percent of the proportion for the State for the preceding fiscal year.

`(iii) CUMULATIVE FLOOR OF 30 PERCENT BELOW THE FY 1999 PROPORTION- A floor of 70 percent of the proportion for the State for fiscal year 1999.

`(iv) CUMULATIVE CEILING OF 45 PERCENT ABOVE FY 1999 PROPORTION- A ceiling of 145 percent of the proportion for the State for fiscal year 1999.

`(B) RECONCILIATION-

`(i) ELIMINATION OF ANY DEFICIT BY ESTABLISHING A PERCENTAGE INCREASE CEILING FOR STATES WITH HIGHEST ANNUAL PERCENTAGE INCREASES- To the extent that the application of subparagraph (A) would result in the sum of the proportions of the allotments for all subsection (b) States exceeding 1.0, the Secretary shall establish a maximum percentage increase in such proportions for all subsection (b) States for the fiscal year in a manner so that such sum equals 1.0.

`(ii) ALLOCATION OF SURPLUS THROUGH PRO RATA INCREASE- To the extent that the application of subparagraph (A) would result in the sum of the proportions of the allotments for all subsection (b) States being less than 1.0, the proportions of such allotments (as computed before the application of floors under clauses (i), (ii), and (iii) of subparagraph (A)) for all subsection (b) States shall be increased in a pro rata manner (but not to exceed the ceiling established under subparagraph (A)(iv)) so that (after the application of such floors and ceiling) such sum equals 1.0.

`(C) CONSTRUCTION- This paragraph shall not be construed as applying to (or taking into account) amounts of allotments redistributed under subsection (f).

`(D) DEFINITIONS- In this paragraph:

`(i) PROPORTION OF ALLOTMENT- The term `proportion' means, with respect to the allotment of a subsection (b) State for a fiscal year, the amount of the allotment of such State under this subsection for the fiscal year divided by the total of the amount available under this subsection for all such allotments for the fiscal year.

`(ii) SUBSECTION (b) STATE- The term `subsection (b) State' means one of the 50 States or the District of Columbia.';

(3) in paragraph (2)(B), by striking `the fiscal year' and inserting `the calendar year in which such fiscal year begins'; and

(4) in paragraph (3)(B), by striking `the fiscal year involved' and inserting `the calendar year in which such fiscal year begins'.

(b) EFFECTIVE DATE- The amendments made by this section apply to allotments determined under title XXI of the Social Security Act (42 U.S.C. 1397aa et seq.) for fiscal year 2000 and each fiscal year thereafter.

SEC. 702. INCREASED ALLOTMENTS FOR TERRITORIES UNDER THE STATE CHILDREN'S HEALTH INSURANCE PROGRAM.

Section 2104(c)(4)(B) (42 U.S.C. 1397dd(c)(4)(B)) is amended by inserting `, $34,200,000 for each of fiscal years 2000 and 2001, $25,200,000 for each of fiscal years 2002 through 2004, $32,400,000 for each of fiscal years 2005 and 2006, and $40,000,000 for fiscal year 2007' before the period.

END